Future Growth Capital (FGC) has confirmed that its UK long-term asset fund (LTAF) has made its first investment in line with the UK government’s Long-Term Investment for Technology and Science (LIFTS) initiative.
The LTAF gained approval from the UK’s Financial Conduct Authority in September 2024 and is the first multi-asset LTAF to be dedicated to the UK market.
It aims to invest across a wide range of UK private market assets to generate potentially higher returns, while also supporting the growth of some of the country’s most exciting businesses, the firm announced.
In November, the British Business Bank completed a £250m investment alongside Phoenix Group, creating a £500m investment vehicle.
FGC said that with a significant appetite to invest in UK private markets, it will also seek to promote the UK’s private markets ecosystem, further enhancing the UK as an attractive destination for international investors.
The firm aims to deploy an initial £1bn as part of a planned £10-20bn deployment over the next decade into UK and global private markets.
Two new funds
At the same time, FGC has announced the launch of two diversified private markets LTAFs, a global strategy and a complementary UK strategy.
Both the global and UK strategies offer actively-managed, diversified private markets exposure to private equity and venture capital, real assets and private debt, and are designed to deliver long-term performance, targeting a 10% investment return after fees per annum.
The global LTAF focuses on providing diversified, managed exposure to assets from private markets in the US, Europe and Asia, to capture the extra return potential of global private markets, in a blended strategy aiming to deliver a smoothed long-term risk and return outcome.
The UK LTAF offers investors the opportunity to take advantage of the strong investment opportunities available in UK private enterprise and UK development projects. It offers investors an efficient way to balance and diversify their public market portfolios now that 36% of the UK’s 500 largest companies are privately held.
It also offers investors the opportunity to participate in the UK’s energy transition, for which circa £900bn of investment in energy infrastructure is needed for the UK to meet its energy transition goals.
Paul Forshaw, FGC’s chief executive officer, said: “By offering complementary global and UK LTAFs side by side we are giving investors the option to decide exactly what their UK and global private markets exposures should be, at a time when investment allocations to the UK are increasingly in focus.”
Ped Phrompechrut, FGC’s chief investment officer, added that private markets are essential building blocks to deliver better pension outcomes.
He said: “Often overlooked is that UK private markets are broader and deeper than many recognise and offer a rich seam of investment return potential. The UK is a hub of innovation, the third largest venture capital market in the world, and the leading supplier of unicorn businesses in Europe. There are great investment opportunities for investors, and we aim to capture these for UK pension savers, alongside providing access to a global strategy.’’
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